Leasing Tips for New Landlords
Investing in property and then leasing it out can be very profitable if you take the right precautions and do things correctly. If you cut corners, you might find yourself in a difficult situation where the property costs you money rather than making you money. This article has a few tips for new landlords looking to rent out their property.
Get proof of ability to pay
Before creating a rental agreement, you can request financial information from potential tenants to ensure they have enough money to pay monthly rent. This could be in the form of a pay slip or employment contract. You can’t make copies or keep this documentation, but viewing it will help you to understand the financial situation of your potential new tenants. If their pay is low and they will be unable to afford the rent plus bills, you can refuse to rent the property to them. This will save you a lot of time and hassle chasing up rent and getting new tenants in the future.
Ask for references
The last thing you want is tenants that pay rent late or destroy your property; this is frustrating and can end up costing you a lot of money. To help avoid this, ask the potential tenants for references from previous landlords. This will help put your mind at ease and prevent any future issues that could have been avoided. If the tenant has a poor reference, you’d be better off waiting and going with another tenant that can provide a positive reference.
Create a legal tenancy agreement
As a landlord, you will be responsible for the tenancy agreement. You need to ensure that the contract is legally binding and covers everything you need to specify. It can be easy to miss things if you haven’t written a tenancy agreement before. You can work with a professional property management business to prevent this issue; they will do all the hard work for you and create the tenancy agreement. Still, you must read over the tenancy agreement and bring up any issues or concerns you have before signing. You may want to add additional clauses around pets and smoking as part of the agreement.
View other properties
The property market can change quickly; it's important to be aware of the market and any changes in price when you’re looking for new tenants. Take time to inspect your competition and the price they’re offering; property in Hong Kong can vary significantly, so it's good to look at what else is available. You might find you can charge a higher monthly rental price, or you may need to reduce your price to be competitive and attract potential tenants.
Paint your property
If you’re in the process of getting your property ready for rental, you should give the whole place a once-over with fresh paint. Choose neutral colours that will appeal to a range of different potential tenants. After all, they will live on your property and use it as their home. Any decoration of a particular taste might put off some tenants, especially if they cannot decorate during their tenancy. Opt for good quality paint that can be wiped down; this will last for much longer.
Get the right insurance
When renting your property, you need to make sure you have the right level of insurance to cover your building and contents if your tenants do any significant damage to the property. You can also get insurance that covers your home if it's left vacant for a while. It's important to get expert advice before taking out landlord insurance, there are many different options, and you want to ensure you choose the right insurance for your situation.
Property management company
One decision you’ll need to make is if you want to rent the property out and manage everything yourself or if you want to use a property management company. This kind of company does all of the hard work for you at a cost. They have the skills to place good tenants and make all of the relevant checks and contracts. They can also do regular inspections to ensure that nothing is wrong with the property. A property management company offers a much more hands-off approach, which can be less stressful but will cost you.